Course Overview
Organisations are increasingly looking to find the right balance in the “Risk/Reward” equation, and in today’s environment using good Credit Risk Management practices to optimise profitability will help your business become more successful.
This course will assist you in thinking outside the normal parameters that most businesses follow. It covers all aspects of Credit Risk, from an application design to write-off and includes case studies and best
practices.
The course is a detailed view of credit risk management that will enable you to manage your business growth while minimising the losses. By having a good grasp of the principle of credit risk management you will be able to identify the right tools to use, develop appropriate strategies to control risk and understand the financial implications of your credit risk decisions.
By attending this course delegates will learn:
- How all areas of business are influenced by Credit Risk Management.
- Principles of credit risk management to maintain control of account acquisition, account management and collections.
- How all parts of Credit Risk management come together.
- How to manage information to create a volume driven business.
- How to create efficient analytics and statistical models in credit risk.
- Forecasting your key credit indicators in order to save your business time and money.
- The trigger points to control provisions and be pro-active.
- How to find the areas where opportunities lie to generate revenue without taking unwanted risks.
Course Methodology
The training program will be highly interactive and will include case studies describing successful
application of best practices by some large organisations. These case studies will be used to highlight the important messages that are covered in the different sessions.
Who should attend
- Risk Managers
- Credit Risk Officers
- Heads of Credit
- Product Managers
- Finance Managers
- Credit Analysts
- Underwriters
- Fast track new recruits
- Auditors
- Senior Lending Officers
Day 1
Introduction
Participants expectation and general discussion about what is the Credit Risk Management role
The Credit Cycle and Principles of Credit Risk Management
This section deals with the process, principles and the responsibilities that underline the fundamentals of Credit Risk Management.
Included are the links between risk profiles/screening and collections.
- Processes
- Responsibilities
- Profiling
- Screening
Typical Credit Risk Systems Infrastructure
The systems that deliver the process are described here together with the legacy that is most common in businesses
Target Market
The Target Market is an area that is usually associated with marketing. Credit Risk should be involved particularly with regards to who is the Target Market. The questions to ask: who and what is the profile that should be targeted and finally the basic principles to observe.
- Who
- Risk Profiles
- Principles
Day 2
Product Planning and Profitability
This section is designed to give participants an understanding of the relative importance of the different components of the profitability equation. The dynamic nature of risk recognition and the use of forecasting techniques to predict future losses are explained.
- Principles
- Profit objectives
- Profit model
- Provisions
Account Acquisition Part 1
The account acquisition process looks at the workflow to begin with and continues with screening tools including manual underwriting. This is then complimented with the criteria through the credit policy considerations and the latest innovations.
- Typical Process
- Scorecards – development & usage
- Underwriting
- Policy rules
- Credit Line assignment
- Latest Innovations
Account Acquisition Part 2
Account (portfolio) Management Part 1
Credit Risk management has an important role to play with existing customers. This includes revenue generation through
line increase program (also line decrease to limit the exposure). Shadow limits and authorisation are addressed because they
are correlated to losses plus the strategies one can use in dealing with the exposure management. Underpinning all the above is the why where and how Behavioural scorecard is used
- Behavioural scorecards, development, data, usage, tracking
- Credit Line Increases – objectives, strategies, common pitfalls
- Shadow Limit/Authorisation strategies
- Exposure Management Strategies
Day 3
Account (portfolio) Management Part 2
Minimising Credit losses through Collections and Recoveries
Collections are usually the most underrated tool in the armoury of Credit Risk Management, not in terms of managing the
logistics, but in terms of applying the appropriate strategies. It is here that we look at the different techniques used to collect, the tools that are available, and the use of analytics in collection strategies. Working the delinquency is critical to keeping losses to a minimum, this is achieved by:
- Setting up the right collections team
- Devise and implement pro-active strategy
- Helping the business to identify tools to minimise losses
- Debt Collections Agency Management
- Loss recognition
- Loss forecasting
Collections/Recoveries Part 2
Day 4
MIS
In a volume driven business the importance of the right MIS cannot be overstated. Without the appropriate MIS the business will always struggle to be optimal in its profitability. "If the business can’t measure it, then it can’t manage it”. This section will go into the type of MIS required and what it tells us.
- Key Performance Indicators
- Monitoring/tracking
- Scorecard MIS
- Threshold Benchmarking
Credit Bureau
With many various bureaus across the world, this session describes what the role of credit bureaus is what type of data
is held and how it can be best used for underwriting and account performance.
- Role of Bureaus
- Data held
- Where the data is used
10 Best Practices
Formulating the right credit risk strategy
Strategic Questions
The 7 strategic questions that are crucial to any business. These are high level questions that the business should address to formulate the right Credit Risk strategy from a senior management level
Course Summary and close.
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Manj Blah
Manj Blah has over 30 years experience in the financial services sector and specifically over 25 years global experience in credit risk management in unsecured lending. He was European Regional Practice leader for Credit Risk Management for Visa Europe as well as MasterCard Advisors and prior to this he was Head of Risk Management for the consumer lending business and small business at Bank of Ireland. He also was Head of Risk Management for NatWest Card Services. Before NatWest Manj worked for Citibank - European Consumer Services (Group), as Business Risk Reviewer (BRR) and Senior Credit/Financial Officer. He has wide experience across Europe. Manj has extensive experience in credit risk covering all aspects from a “cradle to grave” perspective, covering MIS, analytics, strategies and credit financials. He has advised many large organisations in not only how to control credit losses but also in indentifying opportunities in revenue generation.
Interested in holding this course in-house? Please fill out your details and a member of our team will be in touch with more information.
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